Beating Broke

Personal Finance from the Broke Perspective

New Addition to the Beating Broke Family

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Things have been a bit hectic around here over the last week or two. We had a baby!  Surprise.  I seriously realized after she was born that I hadn’t even mentioned the fact that we were expecting on here.  I guess when it’s the third child, the excitement level and having to tell the whole world aren’t as high.  🙁  So, sorry about that.

We’re Pregnant!

Better late than never, right?  Never mind that it’s close to 11 months later.  Our little baby is now a little over a week old.  Insert cute picture of infant here:

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If there’s one thing that we’ve noticed with the third child is that it’s so much different than the first two.  With the first one, we did the typical new parent thing and bought every little gadget and gizmo that all the ads tell you that you need to have.  We had so many clothes, diapers, and formula that we could have opened up our own infant store.  With the second one, we already had a bunch of the gadgets and furniture, so it was cheaper.  Plus, we’d already done this once, and knew what we thought we needed.  We only bought the stuff that we thought we needed.

The third child is a totally different thing.  We’ve done this a couple times, but the last one was 5 years ago.  We’d thrown out most of the furniture, car seats, and most of the toys.  We’d also given away most of the other stuff we had.  But, instead of going out and immediately re-buying all that stuff again, we did it the cheap way.  Some friends of ours recently had a child, so we have borrowed a lot of the gadgets.  Car seats, swings, etc all are  from them.  Another friend of ours recently had a baby that had conveniently just grown out of her newborn clothes.  We had an instant closet full of clothes for our baby. There are some other things that we had to go out and buy, but our costs for new things has been pretty minimal.

Of course, there’s no level of borrowing or purchasing that will get us full nights sleep right now. 🙂

Thinking back, we were early to the baby-making game among our friends.  Borrowing stuff, and receiving hand-me-downs wasn’t really possible with the first two.  I’m glad it is possible here.  I highly encourage you to find as much stuff to borrow if you’ve got friends that have kids.  And it helps if you’ve got friends that have recently had babies too.  Especially when they’re ready to get rid of the boxes of clothes that they’ve gathered.

How do you help make baby cheaper?

 

 

How a Drop in Income Turned Out to Be a Good Thing

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Over the last few months, my husband and I have lost some income.  Not a little drop in income.  About 20 to 25% of our monthly income.  And let me tell you, we weren’t earning more than the median income for a family of five to begin with.

Our budget was already tight, so when the drop in income happened a few months ago, I’ll admit, I panicked a bit.  I felt a little bit desperate.  I’m sure those of you who’ve been in a similar situation know the feeling.

And then I took a deep breath, and told myself we’d be alright.  And we are alright.  We’re actually better than alright.

Taking Stock of the Positive

The first thing I did, after I calmed down a bit, was to look at the positive side.  We had already paid off half of our debt, so we don’t have several debts to pay monthly.  We’re only left with one student loan payment every month, so that is a relief.  (When we started our debt repayment over two years ago, we had five monthly debt repayments that totaled almost $1,000 a month.  Now, we only need to pay $315 a month.)

drop in income a good thingSecondly, we’re used to living on a tight budget because we’ve been doing so as we try to pay down debt.  Our income drop, though not slight, was not going to throw us into a completely different style of living that we weren’t accustomed to.  I’m used to buying my clothes second hand.  I’m used to cooking all of our meals from scratch and not going out to eat.  The only adjustment we had to make was buckling down even more.

Why Our Income Drop Turned Out to Be a Good Thing

While our budget is lean, we still had some fat there.  We subscribe to Netflix for both streaming movies and DVD home delivery.  After the income drop, I decided the home delivery at $11.99 a month could go.  I had been thinking this for awhile, but I was afraid we’d miss the service.  Guess what?  We don’t.  I can borrow most of the movies for free from the library.

In addition, I think much more carefully about purchases now.  Buying something on a whim is no longer a possibility.  I have to think carefully before making a purchase, which has made me realize I don’t need many of the things I’ve been thinking of buying.

I also took other frugal steps that I’d been to lazy to take previously.  I had always read that making your own laundry detergent can be a big money saver.  A year ago, I bought all the supplies that I needed, but I never got around to making it.  Well, I finally did a few weeks ago, and it works great.  Sometimes it takes circumstances to prod me into changes I should have made a long time ago.

Of course, we don’t want to live with such a tight budget indefinitely.  But now I know that there are many cost cutting measures I’ve implemented that aren’t difficult.  When we make more money, that just means I’ll have room for greater savings and paying off that last student loan.

Have you ever experienced a tight budget?  If so, did you find it to be a good thing as I have?

Keeping Up With the Smiths

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Keeping up with the Joneses is bad.  We know that.  From a financial perspective, we spend a great deal of our time overcoming the green monster called envy in order to keep our lives in some semblance of financial order.  We know the Joneses down the street with their big, fancy new SUV.  We see them going on long family vacations.  And we know the guy that mows their lawn.  But, we also know that there’s a pretty high probability that they still owe a ton of money on that SUV.  That that family vacation likely was financed through a credit card.  Their entire financial life depends on them keeping their well-paying jobs.

Forget the Joneses

I’d like to talk about another family.  The Smiths.  You don’t know them.  We don’t talk about them like we do the Joneses.  Why don’t we?  Because, outwardly, their lives are nothing to be envious of.  They don’t own a big house on a double lot.  They don’t drive a brand new Escalade.  Their family vacations consist of weekend trips to state parks or trips to visit family a couple of counties over.  Outwardly, they may even seem a bit downtrodden.  They may seem (GASP!) a bit poor.

Sometimes they are.  Sometimes, they are truly victims of their circumstance, or their poor financial choices along the way.  But, for every one of those families, there’s at least two that aren’t poor.  They have well paying jobs.  They have money in the bank.  And they occasionally barbeque a steak on the cheap grill they have on their back deck.  It’s those Smiths I’d like to talk about.

It’s the Quiet Ones You Have to Watch Out For

Why don’t we know the Smiths?  Because we live in a society that is enamored of our celebrity.  We hang on every word that that famous athlete, or famous actress says.  We try and model our lives after theirs.  They live a glamorous life, full of flashing photography, red carpets, and any number of endorsement deals.

Keeping up with the Smiths

Who wouldn’t want to be like that?  Short of being famous, we decide that we’ll see how close we can get.  The bank doesn’t turn us down for that big house, big car, or vacation to the same beach that the celebrities hang out on.  Maybe we’ll even get to see one of them!

But, it’s the Smiths we should know.  We should know people who live their lives responsibly within their means.  We should know people who live for more than having our fellow neighbors think about how rich we are, and how rich our lives must be.  We should be the Smiths.  We should be the people who drive the reliable older car without the flashy rims and booming sound system.  We should be the people who live in the smaller house that we try and repair ourselves.

Society may push us towards that Joneses sort of lifestyle.  After all, what would become of some of the companies if we stopped trying to keep up with the Joneses and stopped buying all their luxury goods?  What would the news and tabloids cover if we weren’t constantly buying their rags in order to find out what sort of clothes the princes and princesses of some foreign country were wearing this spring?

Shiny Facades, Crumbling Foundations

All around us, there are Smiths.  We don’t notice them, and we rarely get to know them.  We’re surrounded by the Joneses, and the shiny facades of businesses and economies that are driven by their reckless spending.  But, under those shiny facades is a crumbling foundation.  The economy of the world is on shaky ground.  We saw just how shaky it really was in 2008.  When the housing market crashed, it very nearly brought the entire world economy with it.  Luckily, the economy was strong enough at the time to take a beating.  It wasn’t strong enough to bounce right back.  It’s been a long slog back to where we were.  We aren’t even back there yet.  There are still parts of the world that are hurting economically.

Imagine, for a moment, if we rebuilt that economy, not on the sands of bailouts and extended unemployment benefits, and instead built it on the bedrock of hard work and frugality that got us where we were in the first place.  Imagine if we had seen the folly of our loose spending ways and tightened our belts, stuck to our budgets, and started building an economy that doesn’t shake and quiver at the smallest rise in unemployment, or the slightest miss in an earnings report?

What if, instead of running around willy-nilly chasing the lifestyle of the Joneses, we were calmly working ourselves into the stable economy of the Smiths?  What if we all didn’t have wait for our next paycheck to buy gas because our last paycheck went to our mortgage and car payments?  What if we were able to fill a tank of gas from the cash in our bank account and know that we still had our emergency funds to help us along should a real emergency come along?

We can.  We can bring our spending in line with our earning.  We can sell the fancy car that we don’t need.  We can downsize our house to something that we can afford.  Sure, the dependable used car you buy might not have as much chrome as the fancy one.  It might not have the same heated seats.  And the house you downsize to might not have a walk-in closet, or a jacuzzi bath tub.  I’ll let you in on a little secret.  You don’t need them.  They’re luxuries.  You only think that it’s normal to have those things because the Joneses told you it was.

We should be keeping up with the Smiths.

We can be the Smiths.